Kubo.financiero

Kiva conducts regular, ongoing monitoring of all Field Partners, but only posts status updates here in response to relevant, major changes at the partner.

Partner Description:

Kubo.financiero is a regulated microfinance institution that provides accessible and affordable loans to borrowers in Mexico. Ranging from US$400 to $4,100, these loans can be used for working capital, fixed assets, education fees and supplies, and pre-payment for other loans that have higher interest rates.

Kubo operates in Mexico, which has one of the highest average interest rates in Latin America for two major reasons:

1) Banks and other lenders need to cover their administration and operation costs even though they provide very small loans. Incidentally, Mexico has one of the smallest average loan sizes and the deepest market penetration for microloans. The smaller the loan, the higher the interest needs to be to cover all the associated costs -- especially in remote regions where traveling to borrowers is expensive and time intensive.

2) Interest rates are also high because banks and other lenders are unable to take individual risk profiles into account. As a result, they must charge a higher interest rate across the board to cover risk of default -- sometimes as high as 120%.

While Kiva works with other lending partners in Mexico, we’re proud that they charge relatively lower interest rates between 55% and 85%.

Kubo uses an online platform and branchless banking to significantly reduce the cost of lending. Because the microfinance market is Mexico is very large, the organization is able to access a growing amount of data about borrowers and their credit histories.

This enables it to provide borrowers with individualized interest rates of 22% to 50%, depending on a borrower’s risk profile. Interest is charged on declining principal, with no collateral required, and the organization charges a small 3% to 5% service fee to cover administration costs of small loans in remote areas.

By integrating technology and data, Kubo has positioned itself to support the more than 90% of Mexican businesses that qualify as small or micro-enterprises. And, with rapid internet penetration in Mexico, the organization has distinguished itself as an innovative lending platform in the region.

With funding from Kiva lenders, Kubo can expand its lending network even further, reach riskier clients who have less credit history, decrease interest rates for borrowers, and scale its service area.

Kiva Fundraising Status

Other Information Sources

Kubo.financiero's Mission Statement

To increase access to credit and empower people to take ownership of their finances while paying less and increasing their savings over time.

Why Kiva Works With Kubo.financiero

Kiva is committed to expanding access to capital with interest rates that are as affordable as possible. Around the world, money is often lent at sky-high rates that make it hard for people to escape debt. This is especially true in Mexico, where money is often lent regardless of individual borrower risk, and high interest rates are required to cover the administration of small loan amounts. We love that Kubo is innovating to bring down operating costs and to tailor credit to individuals so that it can dramatically lower interest rates for entrepreneurs.